Press Release
Paris, November 13, 2014
GLI Finance Limited platform investment Finexkap completes $22.5 million fundraising to launch the first French on-line working capital financing platform
GLI Finance Limited ("GLI Finance", www.glifinance.com), a leading investor in the alternative finance sector, announces that one of its platform investments, Finexkap, (the "Company"), has completed a $22.5 million fundraising, comprising $7.5 million in Series A equity funding and $15 million to finance the Company's lending operations.
GLI Finance invested $4.1 million in July 2014 as part of the Series A funding round and now has a 26.44% equity stake in the Company following completion of the overall fundraising. Other investors include Finsight (www.finsightvs.com), a globally focused Fintech investment fund which includes partner, and former COO and Board Member of LendingClub, John Donovan, as well as Fintech private investors and family offices. Since its inception, Finexkap has been advised in its financial strategy and fundraising by Luc Hardy of Sagax, an early investor in and advisor of, LendingClub.
Finexkap is the first French working capital financing platform to purchase SMEs' receivables on the web through refinancing vehicles managed by Finexkap AM, which is a wholly owned subsidiary of Finexkap. The platform provides a market-disruptive short-term funding solution to entrepreneurs needing fast access to financing, and the Company plans to use the Series A cash injection to scale up its data and product operations, increase its marketing efforts and make additional strategic recruitments. The Company will use the $15 million of commitments secured for its refinancing vehicle to fund the first batch of receivables.
With an annual volume of receivables for French B-2-B companies exceeding $800 billion in 2013, France constitutes one of the largest factoring markets in the world. Illustrating how unpaid invoices can be a significant inhibitor to growth for small businesses, short-term financing issues are responsible for more than 25% of French corporate bankruptcies. In 2013, 14 factoring companies purchased more than $270 billion of receivables in France. During the first half of 2014, the French factoring market grew by more than 15%. At the same time, access to finance for working capital continues to be a significant constraint for SMEs.
Finexkap's platform provides an alternative and complementary source of working capital funding, focusing on small businesses. In just a few clicks, B-2-B companies can sell their receivables and gain access to short-term financing at competitive rates and on more flexible terms than traditional factoring services.
The technology behind Finexkap is a data-driven credit risk engine, powered by proprietary credit scoring algorithms. Finexkap's statistical models include cutting-edge data science, behavioural analysis and finance theory. These tools score automatically the user's and the debtor's short-term solvencies, as well as the default rate of the relevant invoices.
In France, the acquisition on a regular basis of non-matured receivables is a credit activity which only licensed credit institutions can carry out. After extensive and collaborative regulatory review processes with the French Financial Markets Authority ("AMF") and necessary legal structuring, Finexkap AM has just secured a licence which allows refinancing vehicles managed by Finexkap AM to buy non-matured receivables and, consequently, operate throughout the European Union and in other states party to the European Economic Area agreement.
Following this fundraising and the granting of the AMF regulatory licence, Finexkap's platform will fully launch its financing activities in Q4 2014. Finexkap's team is now in discussions with other institutional and corporate investors to prepare the Company for the next stage of its growth.
Geoff Miller, Chief Executive of GLI Finance, said: "Finexkap has developed a flexible way of financing working capital for SMEs in France by allowing small businesses to choose the invoices they wish to clear and get funded without any sort of commitment, in stark contrast to traditional banks in France which typically do not offer spot financing. With a huge demand for this type of flexible finance and innovative proprietary technology, the platform has huge growth potential and should be a great partner for GLI Finance."
Cédric Teissier and Arthur de Catheu, co-founders and CEOs of Finexkap, said: "The data-driven models we have developed are applied to a securitisation fund. Our investors have access to this fund without any need to analyse the underlying assets. This differs from the marketplace model where companies auction their receivables that many investors, relying on qualitative rather than solvency tests, in reality do not know how to price. With the latter model, the risk/ return ratio ends up being uncorrelated and it is difficult for such a company to scale to a sustainably profitable size. At the end of the day, our solution enables investors to finance SMEs' working capital through a diversified exposure to receivables."
John Donovan, Partner of Finsight said: "Finexkap is addressing real challenges in a very large market and allows a wide range of investors an exposure to an asset class that was previously difficult to obtain on scale and quality. Similarly to LendingClub, this solution has an opportunity to disrupt traditional financing options available to small businesses and offer them new financing resources for growth in France, and later in other EU countries."
Luc Hardy, Partner of Sagax said: "Finexkap leverages new funding services and deep data science to deliver innovative financial services that simply were not possible before. This kind of disruption, which reminds me of the beginnings of LendingClub, can affect an industry and contribute to building a great company."
About GLI Finance Limited (www.glifinance.com)
GLI Finance is a specialist provider of finance to small and medium sized enterprises and is quoted on the AIM market of the London Stock Exchange (ticker GLIF). GLI Finance both invests in loans to SMEs and originates finance for SMEs through a variety of finance platforms.
The platforms in which GLI Finance is invested vary by geography, industry, size of lending and by type of lending. They include global trade finance, UK and US SME lending, offshore lending, UK invoice discounting, European invoice discounting, global multi-asset crowd funding and UK property-backed lending.
About Finexkap (www.finexkap.com)
Founded in 2012 in Paris, Finexkap is a web-based platform that provides revolutionary and easy-to-use features to finance SMEs' working capital.
In just a few clicks, all-sized B-to-B companies can sell their receivables and gain access to short-term financing with competitive advantages compared to traditional factoring services:
- No commitment: no minimum duration or volume
- No guarantee: no personal guarantee
- No paperwork: the whole process is 100% online
- Transparent pricing: from 2.49% of the face value of the receivable
About Finsight (www.finsightvc.com)
Finsight was established to capitalize on global trend of new technologies and business models redefining and disrupting many aspects of financial services. The main areas of investments focus for our Fund are: alternative and marketplace lending, big data and analytics, and payment processing. The Fund invests across all stages of company's development with the main focus on early stage companies. The investment team and advisors comprise of seasoned investment and operational professionals from financial services.
Press contact
GLI Finance Limited
Geoffrey Miller
D: +1 203 916 0003
M: +44 7408 830719
Hazel Stevenson (Camarco)
D: +44 (0)203 757 4989
M: +44 (0)798 600 9720
Finexkap
Cédric Teissier
D: +33 (0)1 82 83 14 42
M: +33 (0)6 72 48 84 49
Arthur de Catheu
D: +33 (0)1 82 83 14 41
M: + 33 (0)6 37 12 59 22
Finsight
Alexander Prokhorov
D: +1 646 461 2156